Arbitrator rules Alaska Airlines broke union contract when it outsourced baggage handling

Three years after more than 480 Alaska Airlines baggage handlers at Seattle-Tacoma International Airport were replaced by lower-paid staff working for an outside vendor, a federal arbitrator ruled Alaska violated its contract with the Machinists union in outsourcing those jobs.

The arbitrator directed the airline Thursday to begin talks with the International Association of Machinists and Aerospace Workers (IAM) union to reach a remedy. If they can't agree, the case will go back to the arbitrator.

Steve Gordon, IAM District 143 president, said the union will push to bring back the same number of union jobs at Sea-Tac.

"Our goal is to provide livable-wage jobs once again back on that ramp in Seattle," Gordon said. "We had 485 union positions on that ramp. This arbitration allows us to stake a claim back on that property."

Many of the workers who lost their jobs in 2005 accepted an Alaska Air severance package, which Gordon acknowledged was "above and beyond the contracted requirements." They have since scattered to jobs elsewhere.

Gordon declined to detail what a remedy might look like, but when asked if Alaska might have to oust the vendor, Menzies Aviation, he said: "It's very possible."

Alaska spokeswoman Caroline Boren said it would be "premature to start speculating on the remedy."

Even though the ruling comes three years after outsourcing started, Gordon said it has relevance today as airlines across the U.S. scramble to cut labor costs further.

"It sends a strong message throughout an ailing industry," said Gordon. "It's absolutely huge for us and for all organized labor. ... Today's ruling solidifies the fact that there are job protections."

Alaska's contract with the union allowed the airline to outsource jobs to a vendor only if doing so reduced costs. The arbitrator ruled that despite the lower wages paid by Menzies, the overall charges were not less than the work done in-house.

Alaska employees who lost their jobs had been earning on average $13.41 an hour.

Just before it took over the contract, Menzies placed job ads offering entry-level positions at $8.75 an hour.

Boren said the company disputes the arbitration finding. "Clearly in this extremely difficult industry environment, we wouldn't continue to outsource if we believed it was costing us more than performing the work ourselves," Boren said.

Herman Wacker, Alaska Airlines' managing director of labor and employment law and associate general counsel, said in a statement that the airline's "focus is on working with the union to determine if we can agree on a remedy."

"Depending on the outcome, the company can appeal the ruling in federal court," Wacker added.

After Menzies started working for Alaska at Sea-Tac in May 2005, there was a rash of accidents that damaged jets on the ground and poor performance that upset passengers waiting for bags.

In response, Menzies brought in consultants in January 2006 and shuffled its leadership on the ground at the airport. Boren said that review and overhaul fixed the problems and that Menzies' performance is meeting all the airline's goals.

She said the average time for bags to reach the luggage carousel after landing is down to 20 minutes. The incidence of both misplaced bags and ground mishaps is below the industry average, she said.

The airline contracts out its baggage handling at all airports except for those in the state of Alaska.

No timetable has been set to negotiate a remedy, but Boren said the company plans to start talks with the union as soon as possible.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

Information in this article, originally published August 8, was corrected August 11. A previous version of this story incorrectly stated the average earnings of Alaska Airlines baggage handlers in 2005 when their work was outsourced to Menzies Aviation.